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TO ALLOW A STATE INDIVIDUAL INCOME TAX CREDIT EQUAL TO SEVEN PERCENT OF A PREMATURE DISTRIBUTION FROM A FEDERAL INCOME TAX DEFERRED RETIREMENT SAVINGS ACCOUNT USED TO MAKE CURRENT AN ARREARAGE ON A MORTGAGE ON PRIMARY RESIDENCE OWNED BY THE TAXPAYER, TO ALLOW THIS CREDIT IN TAXABLE YEARS 2010, 2011, AND 2012, AND TO LIMIT A TAXPAYER TO ONE CREDIT OVER THESE THREE YEARS.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. There is allowed as a credit against the South Carolina income tax liability of an individual an amount equal to seven percent of a distribution taken by the taxpayer in taxable years 2010, 2011, or 2012, from a federal tax deferred retirement savings account, however described, when that distribution is subject to a penalty for its premature distribution, for that portion of the distribution used by the taxpayer to make current an arrearage, including interest, late fees, penalties, and costs, on the taxpayer's mortgage on residential real property owned by the taxpayer. For this credit to be allowed, the interest on the mortgage must be deductible by the taxpayer pursuant to the Internal Revenue Code of 1986 as an interest expense on a primary residence. The credit allowed pursuant to this section may be claimed by the taxpayer only one time over the three years the credit is allowed. The Department of Revenue, in the administration of this credit, may prescribe documentation which must be submitted by the taxpayer in order to claim the credit.
SECTION 2. This joint resolution takes effect upon approval by the Governor.
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